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“disallowance under section 14A”

DisallowancesSection 14ASection 14A2,288 judgments

The decision most relied on for disallowance under section 14A is CIT v. Reliance Petroproducts Pvt. Ltd. (322 ITR 158), cited in 2,228 judgments on BharatTax.

Leading authorities on disallowance under section 14A

CIT v. Reliance Petroproducts Pvt. Ltd.
322 ITR 158 · 2010 · Supreme Court
2,228
citing judgments

Penalty under Section 271(1)(c) for furnishing inaccurate particulars or concealment of income is not automatically leviable if the assessee has made a full disclosure of all particulars and the addition or disallowance arises from a difference of opinion.

CIT v. Reliance Utilities & Power Ltd.
313 ITR 340 · 2009 · High Court
2,118
citing judgments

Where an assessee claims that investments were made out of own funds, interest disallowance under Section 14A read with Rule 8D may not apply if the assessee demonstrates the availability of sufficient interest-free funds to cover such investments.

Maxopp Investment Ltd. v. CIT
402 ITR 640 · 2018 · Supreme Court
1,596
citing judgments

Disallowance under Section 14A is not automatic and requires the Assessing Officer to record satisfaction before applying Rule 8D. Only investments yielding exempt income are considered for disallowance, irrespective of their strategic nature.

Cheminvest Ltd. v. CIT
378 ITR 33 · 2015 · High Court
1,569
citing judgments

A disallowance under Section 14A of the Income-tax Act, 1961, for expenditure incurred in relation to exempt income cannot be made if the assessee has not earned any exempt income during the relevant previous year.

S.A. Builders Ltd. v. CIT
288 ITR 1 · 2007 · Supreme Court
1,484
citing judgments

Interest paid on borrowed funds cannot be disallowed merely because the assessee made interest-free advances, provided those advances were made for business purposes and commercial expediency. The Revenue cannot dictate a businessman's commercial decisions, but the assessee bears the onus to prove the business expediency.

CIT v. HDFC Bank Ltd.
366 ITR 505 · 2014 · High Court
1,261
citing judgments

When an assessee possesses interest-free funds sufficient to cover investments yielding tax-free income, it is presumed that such investments were made from these interest-free funds, precluding disallowance of interest expenditure under Section 14A.

Godrej & Boyce Mfg. Co. Ltd. v. DCIT
328 ITR 81 · 2010 · High Court
1,183
citing judgments

Rule 8D, for computing disallowance under Section 14A for expenses related to exempt income, applies from Assessment Year 2008-09 onwards; for prior years, a reasonable disallowance must be made. The disallowance under Section 14A cannot exceed the actual exempt income earned.

ACIT v. Vireet Investment Pvt. Ltd.
165 ITD 27 · 2017 · ITAT
882
citing judgments

No disallowance under section 14A can be made while computing book profits under section 115JB unless the expenditure is debited to the profit and loss account and satisfies clause (f) of Explanation 1 to section 115JB(2).

Judgments citing disallowance under section 14A

Shalby Ltd., Ahmedabad vs. The PCIT, Ahmedabad-3, Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 1227/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad26 Mar 2026AY 2020-21

Bench: Ms Suchitra Kamble & Shri Narendra Prasad Sinhaassessment Years: 2020-21

Section 132Section 143(3)Section 14ASection 263Section 80G

Delhi High Court in the case of PCIT Vs. Sony India Pvt. Ltd. (167 taxmann.com 549). On the issue of disallowance under section 14A of the Act, the Ld. AR pointed out that no addition in the book profit could be made on the basis of calculation worked out under ... interest of revenue on this issue vis-à-vis MAT income. Shalby Ltd. Vs. PCIT, AY- 2020-21 7 9. As regarding disallowance under section 14A read with rule 8D of the Rules, this aspect was not examined by the AO while completing the assessment. However, the undisputed fact

DCIT, Gurgaon vs. Orient Craft Ltd., New Delhi

ITA 3202/DEL/2017[2011-12]Status: DisposedITAT Delhi20 Mar 2026AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

assessee in Assessment Year 2007–08. 6. Ground No. 2 for Assessment Year 2009–10 to AY 2012-13, relates to the disallowance under section 14A. The Ld. Counsel for the assessee submitted that the disallowance under section 14A has to be limited only to the extent of the exempt

DCIT, New Delhi vs. M/S. Orient Craft Ltd., New Delhi

ITA 3773/DEL/2015[2009-10]Status: DisposedITAT Delhi20 Mar 2026AY 2009-10

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

assessee in Assessment Year 2007–08. 6. Ground No. 2 for Assessment Year 2009–10 to AY 2012-13, relates to the disallowance under section 14A. The Ld. Counsel for the assessee submitted that the disallowance under section 14A has to be limited only to the extent of the exempt

M/S. Orient Craft Ltd., New Delhi vs. DCIT, New Delhi

ITA 3626/DEL/2015[2010-11]Status: DisposedITAT Delhi20 Mar 2026AY 2010-11

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

assessee in Assessment Year 2007–08. 6. Ground No. 2 for Assessment Year 2009–10 to AY 2012-13, relates to the disallowance under section 14A. The Ld. Counsel for the assessee submitted that the disallowance under section 14A has to be limited only to the extent of the exempt

M/S. Orient Craft Ltd., New Delhi vs. DCIT, New Delhi

ITA 3625/DEL/2015[2009-10]Status: DisposedITAT Delhi20 Mar 2026AY 2009-10

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Salil Aggarwal, Sr. AdvFor Respondent: Ms. Monika Singh, CIT(DR)
Section 10BSection 14A

assessee in Assessment Year 2007–08. 6. Ground No. 2 for Assessment Year 2009–10 to AY 2012-13, relates to the disallowance under section 14A. The Ld. Counsel for the assessee submitted that the disallowance under section 14A has to be limited only to the extent of the exempt

Coromandel International Limited, Hyderabad vs. DCIT., Circle-2(2), Hyderabad

In the result the appeal of the assessee is partly allowed for statistical purposes

ITA 738/HYD/2025[2015-2016]Status: DisposedITAT Hyderabad18 Mar 2026AY 2015-2016

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdiaआयकर अपीलसं./I.T.A. No.738/Hyd/2025 ("नधा"रणवष"/ Assessment Year:2015-16) Coromandel International Vs. Dcit, Limited, Circle-2(2), Hyderabad. Hyderabad. Pan: Aaacc7852K (अपीलाथ"/ Appellant) (""यथ"/ Respondent) करदाताका""त"न"ध"व/ : Shri Sp Chidambaram, Advocate Assessee Represented By राज"वका""त"न"ध"व/ : Ms. U. Mini Chandran, Cit-Dr Department Represented By सुनवाईसमा"तहोनेक""त"थ/ : 02/03/2026 Date Of Conclusion Of Hearing घोषणा क" तार"ख/ : 18/03/2026 Date Of Pronouncement Order Per Madhusudan Sawdia, A.M.: This Appeal Is Filed By Coromandel International Limited (“The Assessee”), Feeling Aggrieved By The Order Passed By The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi (“Ld. Cit(A)”) Dated 24/02/2025 For The Assessment Year (“A.Y.”) 2015-16. Page 1 Of 17 Coromandel International Limited Vs. Dcit 2. The Assessee Has Raised The Following Grounds Of Appeal:

Section 250Section 32Section 32(1)(ii)Section 35

assessee under section 143(3) of the Act on 20.12.2017 making an addition of Rs.1,17,93,630/- on account of disallowance under section 14A of the Act, while allowing the claim of the assessee on account of depreciation on non-compete fees and depreciation on royalty amounting to Rs.3

The Bombay Dyeing and Manufacturing Company Limited, Mumbai vs. Income Tax Central Circle 2(1)(1), Mumbai

In the result, the appeal filed by the assessee is hereby allowed for statistical

ITA 5274/MUM/2025[2018-19]Status: DisposedITAT Mumbai18 Mar 2026AY 2018-19

Bench: Shri Om Prakash Kant, Jm & Ms. Kavitha Rajagopal, Am

For Appellant: Shri Yogesh Thar, A.RFor Respondent: Shri Leyaqat Ali Aafaqui, Sr. AR
Section 115JSection 143(2)Section 143(3)Section 14ASection 234BSection 250Section 43C

action of the Id. AO erred in holding that: a) The AO had duly recorded his dissatisfaction with respect to the suo motu disallowance under Section 14A r.w.r 8D as computed by the Appellant; b) The Appellant had failed to establish that it possessed sufficient interest-free own funds ... equity instruments are capable of yielding exempt dividend income and long- term capital gains; d) For the purposes of computation of disallowance under Section 14A of the Act, the fair market value of the investment was required to be considered, as opposed to the cost of investment adopted

M/S. Bank of American, N.A, Mumbai vs. The Jt DIT (I.T)3, Mumbai

In the result, the appeal by the assessee is partly allowed

ITA 4154/MUM/2004[2000-2001]Status: DisposedITAT Mumbai18 Mar 2026AY 2000-2001

Bench: Shri Om Prakash Kantshri Sandeep Singh Karhail

For Appellant: Shri Percy PardiwalaFor Respondent: Shri Krishna Kumar, Sr.DR
Section 10Section 10(15)Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 36(1)(viia)Section 37(1)Section 44C

held that where assessee's own funds and other non-interest bearing funds were more than the investment in tax-free securities, no disallowance under section 14A of the Act can be made. We further find that the Hon'ble Supreme Court in South Indian Bank Ltd. v/s CIT, reported ... held that disallowance under section 14A of the Act would not be warranted where interest-free own funds exceed the investment in tax-free securities and in such a case the investment would be presumed to be made out of assessee's own funds. Therefore, respectfully following the law laid

The Dy DIT (I.T) 1(1), Mumbai vs. M/S. Bank of America N.A., Mumbai

In the result, the appeal by the assessee is partly allowed

ITA 4090/MUM/2004[2000-2001]Status: DisposedITAT Mumbai18 Mar 2026AY 2000-2001

Bench: Shri Om Prakash Kantshri Sandeep Singh Karhail

For Appellant: Shri Percy PardiwalaFor Respondent: Shri Krishna Kumar, Sr.DR
Section 10Section 10(15)Section 142(1)Section 143(2)Section 143(3)Section 14ASection 250Section 36(1)(viia)Section 37(1)Section 44C

held that where assessee's own funds and other non-interest bearing funds were more than the investment in tax-free securities, no disallowance under section 14A of the Act can be made. We further find that the Hon'ble Supreme Court in South Indian Bank Ltd. v/s CIT, reported ... held that disallowance under section 14A of the Act would not be warranted where interest-free own funds exceed the investment in tax-free securities and in such a case the investment would be presumed to be made out of assessee's own funds. Therefore, respectfully following the law laid

Dcm Shriram Industris Ltd, New Delhi vs. DCIT Circle-7(1), New Delhi

In the result, the appeal filed by the assessee is allowed in above terms

ITA 2166/DEL/2022[2018-19]Status: DisposedITAT Delhi18 Mar 2026AY 2018-19

Bench: Shri Challa Nagemdra Prasad & Shri S. Rifaur Rahman

Section 115JSection 143(3)Section 144C(10)Section 14ASection 80Section 92C

Ground no 13: Reversal of Suo-moto disallowance made by the assessee u/s 14A of the Act. 38. The next issue relates to disallowance under section 14A of the Act read with rule 8D while computing income both under the normal provisions as well as under section 115JB ... assessee had not earned any exempt income either by way of dividend or even otherwise, however, the assessee suo motu made some disallowance under section 14A of the Act read with Rule 8D(2)(iii). In the objections raised before DRP, the assessee contended that since the assessee

ACIT, Circle-5(1), Hyderabad vs. Ushodaya Enterprises Private Limited, Hyderabad

In the result, the appeal of the Revenue in ITA No

ITA 1782/HYD/2025[2018-19]Status: DisposedITAT Hyderabad13 Mar 2026AY 2018-19

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

Section 143(1)Section 143(2)Section 143(3)Section 14ASection 14A(2)

therefore contended that since the interest-free own funds available with the assessee were far in excess of the investments, no disallowance under section 14A of the Act could be made. 7. In the alternative, the Ld. AR submitted that the average investment of Rs.346.63 crores considered ... second objection raised by the assessee is that the assessee had sufficient interest-free own funds for making the investments and therefore no disallowance under section 14A of the Act could be made. In this regard, we have gone through the para no. 4 of the order

ACIT, Circle-5(1), Hyderabad vs. Ushodaya Enterprises Private Limited, Hyderabad

In the result, the appeal of the Revenue in ITA No

ITA 1781/HYD/2025[2017-18]Status: DisposedITAT Hyderabad13 Mar 2026AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

Section 143(1)Section 143(2)Section 143(3)Section 14ASection 14A(2)

therefore contended that since the interest-free own funds available with the assessee were far in excess of the investments, no disallowance under section 14A of the Act could be made. 7. In the alternative, the Ld. AR submitted that the average investment of Rs.346.63 crores considered ... second objection raised by the assessee is that the assessee had sufficient interest-free own funds for making the investments and therefore no disallowance under section 14A of the Act could be made. In this regard, we have gone through the para no. 4 of the order

Apcotex Industries Limited, Raigarh vs. Assistant Commissioner of Income Tax Circle 15(1)(1), Aayakar Bhawan, Mumbai

In the result the appeal filed by the assesse stands partly allowed

ITA 6023/MUM/2025[2017-18]Status: DisposedITAT Mumbai13 Mar 2026AY 2017-18

Bench: Smt. Beena Pillai ()

Section 143(2)Section 14ASection 35

Ld.AR submitted that the assessee had invested in equity- oriented mutual funds and equity instruments which yielded exempt income. While computing the disallowance under section 14A, the assessee had suo motu disallowed a sum of ₹63,03,077/- being the portfolio management service (PMS) fees paid, along with ... costs for the purposes of section 14A read with Rule 8D. 4.3. The Ld.AR further submitted that the Ld. AO, while computing the disallowance under section 14A read with Rule 8D(2)(ii), considered the average monthly total deposits and, on that basis, computed the disallowance

DCIT Central Circle-5(4), Mumbai vs. Satyam Realtors Private Limited, Mumbai

In the result, the appeal of the revenue bearing ITA No

ITA 6283/MUM/2024[2017-18]Status: DisposedITAT Mumbai13 Mar 2026AY 2017-18

Bench: Shri Anikesh Banerjee & Shri Jagadishdcit Cc-5(4), Mumbai Vs Satyam Realtors Private Ltd. Room No.436, 4Th Floor, Room No.4, 3Rd Floor Capri, Anant Kautilya Bhawan, Bandrakurla Kanekar Marg Bandra (East) Complex, Mumbai-400051 Mumbai-400051 Pan:Aaccs7290P Appellant Respondent Assessee By : None, Respondent By : Shri Arun Kanti Datta (Cit Dr) Date Of Hearing : 09/03/2026 Date Of Pronouncement : 13/03/2026 O R D E R Per: Anikesh Banerjee (Jm): The Instant Appeal Of The Revenue Was Preferred Against The Order Of The Ld. Commissioner Of Income Tax (Appeal)-53, Mumbai [For Brevity The “Ld. Cit(A)”], Order Passed Under Section 250 Of The Income Tax Act 1961 (For Brevity ‘The Act’) For Assessment Year 2017-18, Date Of Order 24.09.2024. The Impugned Order Emanated From The Order Of The Ld. Assistant Commissioner Of Income Tax

For Appellant: NoneFor Respondent: Shri Arun Kanti Datta (CIT DR)
Section 143(3)Section 14ASection 14A(1)Section 250Section 43B

date of order 28.12.2019. 2. The revenue has taken the following grounds: “1. The Ld. CIT(A) erred in deleting the disallowance under section 14A r.w.r.8D(2) of the Income Tax rules by holding that investment which yielded exempt income are only to be considered for the purpose of disallowance

M. Pratapray Prints Private Limited, Ahmedabad vs. The ACIT, Circle-2(1)(2), Ahmedabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 497/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad12 Mar 2026AY 2017-18

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Mahesh Chhajed, A.RFor Respondent: Shri C Dharani Nath, Sr. DR
Section 14A

debited interest expenditure of ₹51,70,668/- relating to working capital in its profit and loss account but had not made any disallowance under section 14A of the Act while filing the return of income. The assessee submitted before the Assessing Officer that the investments were made ... learned CIT(Appeals) observed that the case of the assessee had been selected for limited scrutiny specifically on the issue of disallowance under section 14A and that the Assessing Officer had computed the disallowance in accordance with Rule 8D of the Income-tax Rules. The learned CIT(Appeals) further noted

Shree Swati Texdyes Pvt. Ltd., Ahmedabad vs. The Dy. CIT, Circle-4(1)(1), Ahmedabad

In the result, the appeal of the assessee is allowed

ITA 2222/AHD/2025[2020-21]Status: DisposedITAT Ahmedabad12 Mar 2026AY 2020-21

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Respondent by: Shri Rameshwar P Meena, Sr. DRFor Respondent: Shri Rameshwar P Meena, Sr. DR
Section 14ASection 270ASection 40

declaring total income of ₹22,94,91,630/-. During the course of assessment proceedings, the Assessing Officer made two disallowances namely (i) disallowance under section 14A of the Act amounting to ₹43,36,150/- and (ii) disallowance of deduction claimed towards Health and Education Cess amounting

Hcl Training & Staffing Services Private Limited, Nehru Place vs. Circle 11(1), Delhi, I P Estate, New Delhi

In the result, the appeal of the assessee is allowed

ITA 7383/DEL/2025[2017-18]Status: DisposedITAT Delhi11 Mar 2026AY 2017-18

Bench: Shri Vimal Kumar & Shri Amitabh Shuklaassessment Year : 2017-18

For Appellant: Shri Aditya Vohra, AdvocateFor Respondent: Ms. Ankush Kalra, Senior DR
Section 143(2)Section 143(3)Section 14ASection 234B

Income-lax Rules, 1962 ("the Rules"). 2.1 That the CIT(A) erred on facts and in law in upholding the disallowance under section 14A of the Act, despite noting the fact that no exempt income was earned by the Appellant during the relevant previous year. 2.2 That

JCIT (OSD), Corporate Circle - 2 (2), Chennai vs. M/S Indian Potash Ltd., Chennai

In the result, the appeal filed by the Revenue is dismissed

ITA 2580/CHNY/2019[2014-15]Status: DisposedITAT Chennai10 Mar 2026AY 2014-15

Bench: Shri Inturi Rama Rao & Shri S.S. Viswanethra Raviआयकर अपील सं./I.T.A. No.2580/Chny/2019 िनधा"रण वष"/Assessment Year: 2014-15 The Joint Commissioner Of Vs. M/S. Indian Potash Ltd., Income Tax (Osd), No. 727, Ambal Building, Corporate Circle 2(2), Anna Salai, Chennai. Chennai 600 006. [Pan: Aaaci0888H] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri Y. Sudarshan, Jcit ""थ" की ओर से/Respondent By : Shri Vikram Vijayaraghavan, Advocate सुनवाई की तारीख/ Date Of Hearing : 27.01.2026 घोषणा की तारीख /Date Of Pronouncement 10.03.2026 : आदेश /O R D E R Per S.S. Viswanethra Ravi: This Appeal Filed By The Revenue Is Directed Against The Order Dated 06.05.2019 Passed By The Ld. Commissioner Of Income Tax (Appeals) 6, Chennai For The Assessment Year 2014-15. 2. The Appellant-Revenue Raised 3 Grounds Of Appeal Amongst Which The Only Issue Emanates For Our Consideration As To Whether The Ld. Cit(A) Is Justified In Allowing Claim Under Section 80Ib Of The Income Tax Act, 1961 [“Act” In Short] In The Facts & Circumstances Of The Case.

For Appellant: Shri Y. Sudarshan, JCITFor Respondent: Shri Vikram Vijayaraghavan, Advocate
Section 11ASection 143(1)Section 143(3)Section 14ASection 80Section 80I

assessment and determined total income at ₹.132,58,14,413/-, inter alia, making disallowance on account of deduction claimed under section 80IB and disallowance under section 14A of the Act vide his order dated 27.12.2016 passed under section 143(3) of the Act. On appeal by the assessee

Asst. Commissioner of Income Tax, Mumbai vs. Reliance Retail Limited, Mumbai

In the result, the appeal filed by the Revenue is dismissed, whereas the appeal filed by the assessee is partly allowed

ITA 4244/MUM/2025[2019-20]Status: DisposedITAT Mumbai10 Mar 2026AY 2019-20

Bench: SHRI SAKTIJIT DEY (Vice President), SHRI MAKARAND VASANT MAHADEOKAR (Accountant Member)

Section 135Section 143(3)Section 144BSection 14ASection 250Section 37(1)Section 80GSection 80JSection 92C

relevant assessment year and restricted the deduction to Rs. 5,94,89,560/- while disallowing Rs. 6,36,64,216/-. iii. Disallowance under section 14A The assessee made suo motu disallowance under section 14A amounting to Rs. 10,73,211/- towards expenditure relatable to exempt income. The Assessing Officer ... Transfer Pricing Officer. On merits, the CIT(A) granted relief to the assessee on the issues relating to deduction under section 80JJAA, disallowance under section 14A, treatment of AJIO marketing expenditure and addition on account of creditors written back. The disallowance under section decided against the assessee. 6. Aggrieved

Reliance Retail Limited, Mumbai vs. Assistant Commissioner of Income Tax Circle 8(1)(1), Mumbai

ITA 3510/MUM/2025[2019-20]Status: DisposedITAT Mumbai10 Mar 2026AY 2019-20

Bench: Shri Saktijit Dey & Shri Makarand Vasant Mahadeokar

Section 135Section 143(3)Section 144BSection 14ASection 250Section 37(1)Section 80GSection 80JSection 92C

relevant assessment year and restricted the deduction to Rs. 5,94,89,560/- while disallowing Rs. 6,36,64,216/-. iii. Disallowance under section 14A The assessee made suo motu disallowance under section 14A amounting to Rs. 10,73,211/- towards expenditure relatable to\exempt income. The Assessing Officer ... Transfer Pricing Officer. On merits, the CIT(A) granted relief to the assessee on the issues relating to deduction under section 80JJAA, disallowance under section 14A, treatment of AJIO marketing expenditure and addition on account of creditors written back. The disallowance under section 80G and certain other issues relating